A two day recovery across the board shows exactly why this market is so treacherous. The trends simply aren’t getting a chance to set their roots.
That’s not to say there haven’t been decent breakouts … there have. But they have been outnumbered by false breakouts.
So, what to do?
- First, this is not a time to be overly adventurous, so stay in your comfort zone.
- Second, focus on those stocks that are hugging the big Key Levels and where the OVI is unambiguous.
In today’s review I’ll show several stocks where this sort of behaviour has still performed rather well even in these challenging conditions.
Also, I’ll show you several stocks that may be in their second phase of forming shrinking retracements. In this way you can anticipate but only act when a confirmed setup has formed. But at least you can keep those stocks on a watchlist to see if a tradeable setup manifests over the coming days and weeks.
Otherwise, this is a market to consolidate your learning. Perhaps review my videos, clean up your watchlists and do some spring cleaning.
As of next week we’ll be getting into pre-earnings, and I would say there will be some serious gyrations this time around.
Last week I mentioned how we’re working on a short-term oscillator … that project continues and I’ll keep you updated as we get closer to launching something. The big win will be having a market-wide short-term indicator to go with the longer term OVIsi.
The idea will be that it will be used to optimize our performance when trading our individual strategies. We only want an indicator with a proper context and proper purpose. This new market indicator will have both.
Today’s OVI Market Review is focused on learning and also how to recognize a setup that hasn’t yet formed but is on its way. Again, the idea is not to act at that point, but to anticipate and then monitor.